Why xG Technology (XGTI) Stock Is Lower Today

NEW YORK (TheStreet) -- xG Technology (XGTI) is tumbling on Wednesday after pricing its public offering of common stock.

By midmorning, shares had taken off 13.4% to $1.88.

The wireless communications specialist said it would offer 5.265 million shares of common stock at $1.90 a share. The underwriters have also been granted a 45-day option to purchase up to 789,750 shares.

The company expects to receive around $10 million in gross proceeds, excluding underwriting discounts and offering expenses.

In a statement, xG said it will use net proceeds for general corporate purposes, including "working capital, product development and fulfillment, marketing activities, expansion of internal sales organization, further development of sales channels, finalizing the transition to contract manufacturing production lines, and other capital expenditures."

The offering is expected to close April 22, depending on customary closing conditions.

Roth Capital Partners is acting as sole book-running manager, while Feltl & Company will act as co-manager.